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February 15, 2017 Article 1 min read
What can history tell us about how markets have performed after an election in which the party of the president changes?

Executive summary 

  • Domestic equities extended their post-election rally in January, with all major benchmarks gaining ground.
  • International stocks outperformed their domestic counterparts in January, earning positive returns in local currency terms as well as benefitting from a foreign exchange tailwind created by a weakening dollar.
  • Most fixed income indices were modestly positive, with those more risk-correlated sectors leading the pack. Returns benefitted from the yield on the benchmark 10-Year Treasury remaining range-bound.
  • As expected, the FOMC left interest rates unchanged following its first 2017 meeting, though the Fed reiterated its expectation to move forward with up to three rate hikes later this year.
  • The initial estimate for fourth quarter U.S. GDP growth of 1.9 percent fell just shy of expectations, but did not meaningfully alter the overall economic picture.

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